| NATURE OF OPERATIONS AND BASIS OF PRESENTATION | 1. NATURE OF OPERATIONS AND BASIS OF PRESENTATION Business Bluejay Diagnostics,
Inc. (“Bluejay” or the “Company”) is a medical diagnostics company developing rapid tests using whole blood on
our Symphony technology platform (“Symphony”) to improve patient outcomes in critical care settings. The Company’s Symphony
platform is an exclusively licensed and patented technology that consists of a mobile device and single-use test cartridges that if cleared,
authorized, or approved by the U.S. Food and Drug Administration (the “FDA”), can provide a solution to a significant market
need in the United States. Clinical trials indicate the Symphony device produces results in less than 20 minutes for intensive care units
and emergency rooms, where rapid and reliable results are required. Bluejay’s first
product, the Symphony IL-6 test, is for the monitoring of disease progression in critical care settings. IL-6 is a clinically established
inflammatory biomarker, considered a ‘first-responder,’ for assessment of severity of infection and inflammation across many
disease indications, including sepsis. A current challenge of healthcare professionals is the excessive time and cost associated determining
a patient’s level of severity at triage and the Symphony IL-6 test could consistently monitor this critical care biomarker with
rapid results providing critical information to the physicians to improve patient care. In the future Bluejay
plans to develop additional tests for Symphony including two cardiac biomarkers (hsTNT and NT pro-BNP), as well as other tests using the
Symphony platform. The Company does not yet have regulatory clearance for its Symphony products, and its Symphony products will need to
receive regulatory authorization from the FDA in order to be marketed as a diagnostic product in the United States. In the future, Bluejay
also plans to explore new products to support Bluejay’s biomarker detection program. Furthermore, Bluejay plans to explore strategic
opportunities around the specimen biobanks generated from the SYMON I and SYMON II clinical studies. We were incorporated
under the laws of Delaware on March 20, 2015. Our headquarters is located in Acton, Massachusetts. On June 4, 2021, the
Company formed Bluejay Spinco, LLC, a wholly owned subsidiary of the Company, for purposes of further development of the Company’s
ALLEREYE diagnostic test. ALLEREYE is a point-of-care device offering healthcare providers a solution for diagnosing Allergic Conjunctivitis. Risks and Uncertainties Risks related to the
Company’s FDA regulatory and clinical trial, Nasdaq listing and going concern status are each described below. In addition, the
Company is subject to several risks similar to other companies in its industry, including rapid technological change, competition from
larger companies, availability of raw materials and device components, and dependence on key personnel. FDA Regulatory
and Clinical Trial Update Our current regulatory
strategy is designed to support commercialization of Symphony in the United States pending marketing authorization from the FDA. Previously,
our regulatory strategy involved clinical studies involving COVID-19 patients. However, we have shifted our focus away from COVID-19 patients
due to a significant decline in the number of COVID-19 related hospitalizations. Pursuant to this revised strategy, we have completed
a pilot clinical study (SYMON-I) and plan to begin a clinical study (SYMON-II) to validate the results of the pilot study to support an
FDA regulatory submission with an initial indication for risk stratification of hospitalized sepsis patients. We submitted a pre-submission
application to the FDA presenting the new study design in May 2023 and participated in a pre-submission meeting on August 11, 2023. At
the meeting, the FDA provided feedback on the new study design, determined that the submission of a 510(k) is the appropriate premarket
submission pathway, and requested that certain data be provided in the 510(k). Based on this feedback, we are determined to proceed on
this basis, which considers the FDA’s feedback. In the second quarter
of 2024, we completed a multicenter SYmphony IL-6 MONitoring Sepsis (“SYMON”) clinical study investigating the role of interleukin-6
(IL-6) in patients diagnosed with sepsis and septic shock. This prospective study assessed the performance of IL-6 upon initial presentation
to the intensive care unit (ICU). A primary analysis of the SYMON-I pilot clinical study (registered clinical trial number NCT06181604)
highlighted that IL-6 levels within 24 hours of sepsis or septic shock diagnosis and admission to the ICU may predict patient mortality
out to 28 days. We will seek to validate these findings in the SYMON-II pivotal study. Furthermore, a secondary
outcome of the SYMON-I study showed that IL-6 levels within 24 hours of sepsis or septic shock diagnosis and admission to the ICU is a
predictor of patient mortality during their hospitalization. Other secondary outcomes showed that lactate and Sequential Organ Failure
Assessment (SOFA), standard clinical tests used for sepsis and septic shock patients, were not predictors of patient mortality out to
28 days. We believe that the findings
underscore the potential importance of IL-6 as a predictor and provide new insights into the potential pathways for improving sepsis outcomes. The SYMON II clinical
study has three components: (1) collection, freezing, and biobanking of patient samples, (2) measuring IL-6 concentrations in the biobanked
samples near the end of patient enrollment or after the patient enrollment has completed, and (3) analysis of the IL-6 data with the patient
outcomes to see if the established IL-6 cutoff value has been validated for 28-day all-cause mortality. We initiated the SYMON-II
pivotal clinical study in the third quarter of 2024. We plan to start patient enrollment during the fourth quarter of 2024. Our goal is
to use the Symphony IL-6 test to complete the testing in the SYMON-II clinical trial. We are experiencing several technical challenges
related to the Symphony Cartridge product that we expect to delay our ability to complete such testing. In particular, several individual
components in our product may need to be replaced and validated due to limited supply or discontinuation (including the antibody used
in the product). In addition, we are working to correct several reliability issues with the Symphony Cartridge product. At this time,
we anticipate these delays will prevent us from submitting an FDA application within the next 18 months. If we are able to complete
the SYMON-II clinical study and the results are positive, we intend to use the data generated from SYMON-II to support a 510(k) application
to the FDA. This application will be based on the following intended use: “Symphony IL-6 is intended for use to determine the IL-6
concentration as an aid in assessing the cumulative 28-day risk of all-cause mortality in conjunction with other laboratory findings and
clinical assessments for patients diagnosed with sepsis or septic shock in the ICU.” We also plan to present the SYMON-I and SYMON-II
results at future national scientific meetings and publish them in peer-reviewed journals. For Symphony, we remain
in the development phase of the overall product launch cycle. Currently are experiencing issues with critical materials and pilot production
performance that could negatively affect our projected timeline for FDA submission. We are developing plans to improve product performance,
ensure supply of these critical materials, and transfer production and all supply chain activities from the original developer and current
supplier of cartridge intermediates (Toray) to an FDA-registered contract manufacturer (CMO). We expect that production lots for validation
testing to support the FDA submission will be available once a transfer to an FDA registered CMO is completed. If we are unable to meet
the manufacturing requirements or analytical performance required for FDA clearance with Symphony, we may consider using an alternative
IL-6 test for the SYMON-II study. Our ability to engage
in and complete the activities needed for an FDA submission, will be contingent upon us addressing these and other challenges, including
possessing and/or raising sufficient capital, remaining a going concern, and producing product capable of supporting our product requirements
and meeting analytical validation and clinical validation. June 2024 Reverse Stock Split On June 20, 2024, we effected a reverse stock
split of our shares of common stock at a ratio of 1-for-8 (the “2024 Reverse Stock Split”). The Company’s common stock
continued trading on Nasdaq on a post-split basis under the Company’s existing trading symbol, “BJDX.” All of the Company’s historical share and
per share information related to issued and outstanding common stock and outstanding options and warrants exercisable for common stock
in these financial statements have been adjusted, on a retroactive basis, to reflect the Reverse Stock Split. Nasdaq Minimum Bid Price Non-Compliance Our common stock currently is listed for quotation
on the Nasdaq Capital Market. We are required to meet specified financial requirements in order to maintain such listing, including a
requirement that the bid price for our common stock remain above $1.00, and that the market value of our publicly held securities be at
least $1 million. On February 28, 2024, we received a notification
letter from the Nasdaq Listing Qualifications Staff of the Nasdaq Stock Market LLC (“Nasdaq”) notifying us that the closing
bid price for our common stock had been below $1.00 for the previous 30 consecutive business days and that we therefore are not in compliance
with the minimum bid price requirement for continued inclusion on the Nasdaq Capital Market under Nasdaq Listing Rule 5550(a)(2). The
notification has no immediate effect on the listing of our common stock on the Nasdaq Capital Market. On August 28, 2024, at the Company’s request,
Nasdaq’s Listing Qualifications Staff notified the Company that it has extended the time for the Company to regain compliance with
the minimum bid price requirement until February 24, 2025. To regain compliance, the closing bid price of our common stock must be at
least $1.00 or higher for a minimum of ten consecutive business days, and in such case, Nasdaq will provide us with written confirmation
of compliance. If we are not able to cure the deficiency during this compliance period, Nasdaq will provide written notice to us that
our common stock will be subject to delisting. In the event of such delisting notification, we may appeal Nasdaq’s determination
to delist our securities, but there can be no assurance that Nasdaq would grant our request for continued listing . We intend to take all reasonable measures available
to us to achieve compliance to allow for continued listing on the Nasdaq Capital Market. However, there can be no assurance that we will
be able to regain compliance with the minimum bid price requirement or will otherwise comply with other Nasdaq listing criteria. On June
20, 2024, we effected a reverse stock split of our shares of common stock at a ratio of 1-for-8, however, our common stock did not remain
above a trading price of $1.00 following such reverse stock split. If our common stock does not regain compliance with the minimum price
requirement during the remaining compliance period, we may need to effect a further reverse stock split, whereby shares of our common
stock are further consolidated with the intent that the per-share trading price becomes greater than $1.00 per share on a sustained basis
sufficient to regain compliance with the applicable Nasdaq requirements. On October 23, 2024, at a special meeting of stockholders, the
Company’s stockholders approved a proposed amendment to the Company’s certificate of incorporation to effect a reverse stock
split of the Company’s outstanding shares of common stock by one of several fixed ratios (1-for-20, 1-for 25, 1-for-30, 1-for-35,
1-for-40, 1-for-45 and 1-for-50). The Company’s board of directors is considering whether to proceed with implementation of the reverse stock split, including the
timing and ratio thereof. As of the close of business on November 4, 2024,
the market value of our publicly held common stock (which is our only outstanding class of securities) was approximately $2.0 million,
and the most recent closing price of our common stock on the Nasdaq Capital Market was $0.0729 per share. If the market value of our publicly
held common stock declines below $1 million, or the closing price of our common stock declines to $0.10 per share or less for 10 consecutive
trading days, we would also be subject to Nasdaq delisting proceedings on that basis. Nasdaq’s staff also maintains discretionary
authority under its listing rules to delist companies whose capital structure or public offerings raise public interest and investor protection
concerns, including as a result of highly dilutive issuances, and it is possible that Nasdaq could assert that past offerings that we
have consummated, or future offerings we may consummate, raise such concerns. If our common stock is delisted, we may seek to
have our common stock quoted on an over-the-counter marketplace, such as on the OTCQX. The OTCQX is not a stock exchange, and if our common
stock trades on the OTCQX rather than a securities exchange, there may be significantly less trading volume and analyst coverage of, and
significantly less investor interest in, our common stock, which may lead to lower trading prices for our common stock. Any potential delisting of our common stock from the Nasdaq Capital
Market may have materially adverse consequences to our stockholders, including:
● A reduced market price and liquidity with respect to our shares of common stock, which could make our ability to raise new investment capital more difficult;
● limited dissemination of the market price of our common stock;
● limited news coverage;
● limited interest by investors in our common stock;
● volatility of the prices of our common stock, due to low trading volume;
● our common stock being considered a “penny stock,” which would result in broker-dealers participating in sales of our common stock being subject to the regulations set forth in Rules 15g-2 through 15g-9 promulgated under the Exchange Act;
● increased difficulty in selling our common stock in certain states due to “blue sky” restrictions; and
● limited ability to issue additional securities or to secure additional financing. Going Concern Uncertainty The accompanying unaudited condensed consolidated
financial statements were prepared under the assumption that the Company will continue as a going concern, which contemplates that the
Company will be able to realize assets and discharge liabilities in the normal course of business. Our operations to date have been funded primarily
through equity financings. As of September 30, 2024, the Company had cash and cash equivalents of approximately $5.8 million, and current
liabilities of approximately $1.0 million. During the nine-month period ended September 30, 2024, the Company’s net cash used in
operating activities was approximately $6.1 million. The future viability of the Company is largely dependent on its ability to raise
additional capital to finance its operations. The Company expects that it will need to raise additional capital within the next twelve
months to continue its operations as the current cash resources will be sufficient to fund its operations through the first quarter of
2025. Although the Company has been able to raise capital in the past, there is no assurance that it will be successful in obtaining additional
financing on terms acceptable to the Company, if at all. In addition, recent fundraising by the Company has resulted in significant ownership
dilution to shareholders, and given the Company’s current market capitalization and financing needs, it is likely that future fundraising
may also be highly dilutive. If the Company is unable to obtain funding, it may be forced to delay, reduce or eliminate its research and
development program, product development or commercialization efforts, which could adversely affect its business prospects. Accordingly, based on the considerations discussed
above, management has concluded there is substantial doubt as to the Company’s ability to continue as a going concern within one
year after the date these condensed consolidated financial statements are issued. The Company plans to continue to fundraise. If adequate
funds are not available, the Company may require further steps to slow cash burn, extending the cash runway until financing can be secured.
These condensed consolidated financial statements do not include any adjustments with respect to the carrying amounts of assets and liabilities
and their classification that might result from the outcome of this uncertainty. Basis of Presentation The accompanying unaudited condensed
consolidated financial statements of the Company have been prepared in conformity with generally accepted accounting principles in the
United States (“US GAAP”) consistent with those applied in, and should be read in conjunction with, the Company’s audited
consolidated financial statements and related footnotes for the year ended December 31, 2023, included in the Company’s Annual Report
on Form 10-K. The unaudited condensed consolidated financial statements reflect all adjustments, which include only normal recurring adjustments,
necessary for the fair presentation of the Company’s financial position as of September 30, 2024 and December 31, 2023, its results
of operations and cash flows for the three- and nine-month periods ended September 30, 2024, and 2023, in accordance with US GAAP. The
unaudited condensed consolidated financial statements do not include all the information and footnotes required by US GAAP for complete
financial statements, as allowed by the relevant U.S. Securities and Exchange Commission (“SEC”) rules and regulations; however,
the Company believes that its disclosures are adequate to ensure that the information presented is not misleading. The condensed consolidated
financial statements include the accounts of the Company and its wholly owned subsidiary. All intercompany balances and transactions have
been eliminated in consolidation. The results for the three- and nine-month
periods ended September 30, 2024, are not necessarily indicative of the results that may be expected for the fiscal year ending December
31, 2024, or any other interim period within this fiscal year. |
